Harbour Energy plc (LSE:HBR) reached an agreement to acquire Upstream assets and Exploration rights of Wintershall Dea AG for $10.1 billion on December 19, 2023. Under the terms of agreement, Harbour Energy is acquiring all of Wintershall Dea's upstream assets including producing and development assets as well as exploration rights in Norway, Germany, Denmark, Argentina, Mexico, Egypt, Libya and Algeria as well as Wintershall Dea's CO2 Capture and Storage ("CCS") licences in Europe. Wintershall Dea's Russian assets are excluded. Under the terms of the business combination agreement entered into between Harbour, BASF and LetterOne (the"BCA"), Harbour will acquire the Target Portfolio for $11.2 billion comprising: The porting of existing Wintershall Dea Bonds with a nominal value of c.$4.9 billion and a weighted average coupon of c.1.8 per cent to Harbour, Approximately 921.2 million new Harbour shares issued to Wintershall Dea's shareholders (the "Consideration Shares") at an agreed value of $4.15 billion or 360 pence per Harbour share, representing a premium of c.60 per cent to Harbour's 30-day volume weighted average share price of c.227 pence, such that on completion: BASF, a 72.7 per cent shareholder in Wintershall Dea, will own 46.5 per cent of Harbour's listed Ordinary Shares with Harbour's current shareholders owning 53.5 per cent, LetterOne, a 27.3 per cent shareholder in Wintershall Dea, will own 251.5 million non-voting, non-listed convertible ordinary shares with preferential rights (the "Non-Voting Shares"). Following completion and conditional upon the average price of Brent oil in certain agreed test periods, potential contingent payments of up to a maximum of $300 million may be made by Harbour to BASF and LetterOne over the four years following completion. If the Non-Voting Shares were to be converted into Ordinary Shares, Harbour's current shareholders would own 45.5 per cent of Harbour; BASF and LetterOne would own 39.6 per cent and 14.9 per cent, respectively and $2.15 billion of cash consideration to be funded through cash flow generated from the Target Portfolio between the effective date of 30 June 2023 and completion, and an underwritten bridge facility. The Wintershall Dea Bonds form part of the Target Portfolio to be acquired by Harbour and the liabilities in respect of the Wintershall Dea Bonds will be assumed by Harbour at completion. Completion of the Acquisition will not trigger a change of control (as defined in the relevant terms and conditions) or a bond investor put right given Harbour's expected investment grade credit rating status. All of Wintershall Dea's assets located in Russia or held in joint ventures with Russian companies are excluded from the Acquisition as is Wintershall Dea's stake in WIGA Transport Beteiligungs-GmbH & Co. KG. LetterOne's Non-Voting Shares are convertible (on a one-for-one basis) into Ordinary Shares on the satisfaction of certain conditions, including receipt of relevant regulatory approvals (if applicable). The transaction will create one of the world?s largest and most geographically diverse independent oil and gas companies, domiciled in the U.K., with the scale, reach and international connectivity to manage energy volatility and capitalize on the energy transition.

Post completion, Harbour will continue to be Chaired by R. Blair Thomas, with Linda Z. Cook and Alexander Krane remaining as Chief Executive Officer and Chief Financial Officer, respectively. All Target Portfolio employees will be transferred to Harbour on completion. In addition, Harbour intends to take on some employees from Wintershall Dea's corporate headquarters. BASF will be entitled to nominate two Non-Executive Directors to the Board of Harbour provided BASF holds at least 25 per cent of the Ordinary Shares, and one Non-Executive Director in the event BASF holds between 10 and 25 per cent, BASF's Ordinary Shares will be subject to a six month lock-up following completion (subject to customary exceptions). The lock-up arrangements will also apply to any Ordinary Shares held by LetterOne in the event LetterOne converts its Non-Voting Shares into Ordinary Shares within the period of six months from completion. Harbour intends to take on some employees from the current headquarters into the combined company. The directors of Harbour and certain of their connected persons have irrevocably undertaken that they will vote in favour of the relevant resolutions required to implement the Acquisition at the shareholder meeting in respect of their own beneficial holdings of Harbour shares, representing approximately 1.7 per cent of the existing share capital of Harbour as at December 20, 2023. Until closing, Wintershall Dea and Harbour will continue to operate as independent companies.

Harbour will seek shareholder approval and re-admission of its Ordinary Shares and admission of the new Ordinary Shares upon completion to the premium listing segment of the Official List of the Financial Conduct Authority (the "FCA") (or a listing on the single category for equity shares in commercial companies if such new listing category, as contemplated in FCA Consultation Paper CP23/31, has been implemented by the FCA and taken effect at the relevant time) and to trading on the main market for listed securities of the London Stock Exchange. The Acquisition is subject to, amongst other things, regulatory, antitrust and foreign direct investment approvals, as well as Harbour shareholder approval. The directors of Harbour have determined that the Acquisition is in the best interests of Harbour based on a number of factors and intend unanimously to recommend that shareholders vote in favour of the relevant resolutions at the shareholder meeting to be held to approve the Acquisition. As of January 2, 2024, as a part of acquisition, Fitch Ratings has placedHarbour Energy PLC's (Harbour) Long-Term Issuer Default Rating (IDR) of 'BB' on Rating Watch Positive (RWP). Completion of the Acquisition is expected to occur in Q4 2024. The Acquisition is also accretive to Harbour's free cash flow, supporting enhanced and sustainable shareholder returns. The Board of Directors of Harbour believe the Acquisition is a strong strategic fit, in line with its stated M&A objectives, and offers a transformational value-creating opportunity for Harbour's shareholders. As at January 17, 2024, Harbour had received irrevocable undertakings from shareholders currently representing more than 25% of its issued share capital to vote in favour of the acquisition.

Michael Powell and Ben Plant of Barclays Bank PLC and James Janoskey and Daniele Apa of J.P. Morgan Cazenove acted as financial advisor to Harbour plc. Steven Fox, Simon Williams, Graham Phillips, Dominik Hess, Axel Wittmann, Simon Thomas, Chinwe Odimba-Chapman, Sonia Gilbert, Clare Hoxey, Nicola Hemsley, Dominik Engl, Claus Peter Knoelle, Michael Lyons and Philip Angeloff of Clifford Chance LLP acted as legal advisor to Harbour. Shaun Lascelles, Davina Garrod, Kambiz Larizadeh and Amy Kennedy of Akin Gump Strauss Hauer & Feld LLP acted as legal advisor to LetterOne in the transaction. Morgan Stanley & Co. International plc acted as financial advisor and Rick van Aerssen, Sabrina Kulenkamp, Graham Watson, Samira Afrasiabi, Thomas McGrath, Rafique Bachour, Frank Röhling, Norbert Schneider, Frank Schaer, Philipp Dohnke, Bukunola Alakija and Sarah Jensen of Freshfields Bruckhaus Deringer acted as legal advisor to BASF. Société Générale Securities Services SA and Moelis & Company LLC acted as financial advisor and Sylvain Dhennin and Alastair Young, Charles Jemmett, Volker Geyrhalter, Florian Bortfeldt, Cornelius Naumann, Kerstin Neighbour and Lourdes Catrain of Hogan Lovells acted as legal advisor to L1 in the transaction.